POWERED BY MOMENTUM MEDIA
20 per cent rule 'antiquated'
The Association of Superannuation Funds of Australia (ASFA) has described the so-called ‘20 per cent rule’ as “antiquated” and “not reflective of current realities”.
In a submission to the Treasury’s Board of Taxation responding to a discussion paper issued last year, ASFA said it did not believe that superannuation funds should not be treated as exempt investors.
Further, the submission pointed to the fact that complying superannuation entities had commenced to be taxpayers in mid-1988 and had therefore ceased to be tax exempt entities from that point.
However, it said that in the present Division 6C of the taxation legislation, complying superannuation entities were the only taxpaying entities listed in the definition of “exempt entity” and thereby subject to the so-called 20 per cent rule.
“In part, at least, this would appear to be an accident of history,” the ASFA submission said. “An ASFA concern is that the Government has not formally enunciated the policy reasons for the continued inclusion post 1 July, 1988, of complying superannuation entities as an ‘exempt entity’.”
It said that the broad policy basis for Division 6C was that managed funds should not be actively involved in trading businesses because of competitive neutrality and that there would appear to be no clear basis for the extension of the competitive neutrality argument to trusts owned wholly by one superannuation entity, or by a small pool of superannuation entities.
AUTHOR
Mike Taylor
Recommended for you
First Nations Australians have faced systemic barriers accessing super, with rigid ID checks, poor service, and delays compounding inequality.
“Slow and steady” appears to be the Reserve Bank’s approach to monetary policy as the board continues to hold on to its wait-and-see method.
AFCA’s latest data has shown a decline in complaints relating to superannuation, but there is further work to be done, it has warned super funds.
Limited exposure to fossil fuel companies has positively impacted the performance of Australian Ethical’s balanced and growth funds, the super fund says.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom 465 Calder Road Calder
96.54 3 y p.a(%)
2
DomaCom DFS Mortgage
85.26 3 y p.a(%)
3
Global X 21Shares Bitcoin ETF
78.55 3 y p.a(%)
4
BetaShares Crypto Innovators ETF
50.39 3 y p.a(%)
5
Global X GlobalX FANG+ ETF
47.50 3 y p.a(%)
